China pledges to boost consumer support

June Chen and agencies

China will promote stable growth in household income in 2025 by stepping up direct fiscal support to consumers and boosting social security, the Central Financial and Economic Affairs Commission said yesterday.

This came as the People's Bank of China said that it will make comprehensive use of a variety of monetary policy tools to cut the reserve requirement ratio and interest rates in a timely manner to achieve abundant liquidity.

It will also guide banks to fully meet the demand for eligible credit and promote stable credit growth.

China has set expanding domestic demand as a top priority to spur growth next year as significant pockets of weakness in the crisis-hit property sector continue to forestall a full-blown revival.

The trend of China's consumption recovery has not changed despite year-on-year retail sales growth in November, as it slowed from October, China statistics bureau spokesperson Fu Linghui said at a media briefing in Beijing.

The combination of existing and new policies will gain more traction and kick in, but the external situation has become more complex and severe, Fu said, adding China will implement more policies to expand domestic demand.

China's industrial output rose 5.4 percent from a year earlier in November, quickening from October's 5.3 percent growth, signalling tentative stabilization in the world's second-largest economy as recent stimulus measures start to take hold.

Data released yesterday by the National Bureau of Statistics beat expectations for a 5.3 percent rise in a Reuters poll of 26 analysts.

Retail sales, a gauge of consumption, grew 3 percent in November, down from a 4.8 percent rise in October. Analysts had predicted a 4.6 percent expansion.

China's fiscal revenue in the first 11 months of 2024 fell 0.6 percent from a year earlier, narrowing from a 1.3 percent slide in the January-October period, finance ministry data showed yesterday.

Fiscal expenditure grew 2.8 percent in the first 11 months, compared with a 2.7 percent increase in the first 10 months.

Moody's Ratings said it had raised China's 2025 GDP growth forecast to 4.2 percent from 4 percent as it expects credit conditions to stabilize and Beijing's stimulus efforts since September to mitigate some impact from potentially higher US tariffs.

The forecast also comes with the good news that China's home prices fell at its slowest pace in 17 months in November, with the crisis-hit property market showing signs of stabilizing in some major cities amid government efforts to revive the real estate sector.

However, property investment in China fell 10.4 percent in the first eleven months of 2024 from a year earlier, after dropping 10.3 percent in January-October, NBS data showed.

In stock markets, shares in Hong Kong and the mainland fell slightly yesterday after disappointing retail sales data showed the world's second-biggest economy is still struggling to recover and waiting for major central banks' meetings this week.

The Hang Seng Index dropped by nearly 1 percent or 175 points before closing at 19,795 points. The CSI 300 Index, a benchmark for mainland stock markets, decreased by 0.5 percent to 3,911 points.